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Communication Moves Centre Stage

By Paul Argenti
Published: December 28 2009 22:01 | Last Updated: December 28 2009 22:01

This piece was written by Professor Paul A. Argenti‚ Professor of Corporate Communication at Dartmouth's Tuck School of Business. It focuses on recent research entitled “Communications in Crisis” which was conducted in a partnership between Doremus and Tuck.

The past year has seen the biggest collapse in confidence in business in almost a century – to the point where probably the least trusted spokespeople on the planet today are corporate executives. When intense scrutiny and mistrust prevail‚ whatever a company does says something about it‚ everything communicates‚ and communication affects everything.

This is changing the definition of communication. For example‚ while most companies focus on formal channels such as advertising and public relations to impart important messages‚ the behaviour of executives also speaks to key constituencies. Remember the three automotive executives who flew in on corporate jets to testify in front of the US Congress?

Communication today is more of a two-way dialogue and this has been aided by the rise of social media and the explosion of information-sharing online. The economic meltdown has put social media on steroids‚ with the centre of control shifting from institutions to communities of individuals.

Today’s best-in-class companies‚ such as Dell in the US and Philips in Europe‚ do not just engage in dialogue. They use the latest technology as a source of ideas‚ opinions and competitive intelligence‚ for product development‚ employee engagement and media monitoring.

In addition to rethinking the definition of communication‚ the best companies are rethinking its structure. There is a greater need for integration‚ collaboration and partnership among corporate leadership‚ human capital‚ finance‚ sales and legal teams.

There are many more opportunities for marketing and communications to have an impact on business strategy. As a result‚ communication needs to move from the spinning of strategy to its development.

A third change in communication by leading companies is the rethinking of key themes. This was the main finding of research by the Tuck School of Business at Dartmouth‚ conducted with Doremus‚ a business-to-business communications agency. It found that the best-in-class companies have been guided by six themes:

Focus on value and values
Stakeholders demand value for money when buying goods and services‚ but they also expect to see a strong set of corporate values in the companies with which they do business. Walmart‚ Hyundai and BMW have used this theme in their advertising and communications.

Evolve a sense of responsibility
Corporate responsibility today is not just about philanthropy or being green. It is about companies being responsible across all business practices. NGOs‚ consumers‚ employees and investors are ready to punish companies that ignore evolving social values. JPMorgan Chase has done a fabulous job reflecting its corporate responsibility initiatives on its website and in advertising.

Strategy must drive communication
As Jon Iwata‚ IBM’s senior vice-president for marketing and communications‚ puts it: “Lincoln said‚ ‘Character is the tree; reputation is the shadow.’ I’m afraid too many people in PR‚ marketing and advertising spend more time manipulating the shadow than tending to the tree.”

Shifting from the problem to the solution
Everyone is ready to “de-emphasise” the past year. Stakeholders are most receptive to realistic and optimistic plans.

Around the time their chief executive was being harassed about taking his jet to Washington‚ Ford’s communicators realised that the company was being grouped in the public mind with peers who were much worse off financially.

They launched in one weekend “The Ford Story‚” a turnround message that‚ fuelled by social media and product development‚ has driven all the group’s marketing for the past nine months.

Not communicating is a communication in itself
Whether it is AIG and Goldman Sachs executives standing behind glass in Michael Moore’s movie Capitalism: a Love Story‚ or Tiger Woods’ pleas for privacy in the face of a loss of reputation‚ silence is its own statement. You either tell your story or have it told for you.

Re-evaluate positioning
The crisis has led to disruption in how companies are thought of by constituencies‚ which provides a tremendous opportunity to reposition‚ rebrand‚ and redevelop.

GMAC’s creation of a brand to become Ally bank in the US shows how companies are emerging with inventive ways to redefine themselves.

The best companies know that now is not the time to focus on the mistakes of the past.

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